Product transfers are growing in popularity with 87% of remortgagers choosing to stay with their existing lender rather than move elsewhere, according to latest figures from UK Finance.

The trade body reports that this is up from 80% in 2021 and 73% in 2019.

And with an estimated 1.8m fixed-rate deals due to end this year – 57% of which are at rates below two per cent – the trend looks set to continue.

It’s a pattern confirmed by brokers who attribute the rise in product transfers to the fact they are less hassle and don’t require an affordability check. They also say lenders are pricing product transfers in line with their new business ranges.

Private Finance technical director and senior mortgage advisor Chris Sykes comments: “At the moment, the product transfer is very often the most competitive option for people and doesn’t involve a whole re-underwrite.

“Most lenders are pricing their product transfers in line with their new business ranges, so if their new business is competitive, they’ll likely have a good customer retention rate. With transaction levels down, retention is key for lenders.”

Verve Financial director Gary Boakes says: “It is positively raining product transfers at the moment. The reason? Lenders see this as easy business to keep, the rates are all competitive and with the ability to cancel and switch to new rates if they become lower, they have been the perfect solution for many people.”

Lodestone managing director Craig Fish comments: “We are most definitely seeing more product transfers than in previous years. The reason is twofold: firstly, fewer transactions are happening and lenders need to secure business, so the easiest route is via their existing client bank. Historically, lenders didn’t reward loyalty, but this year has seen a change to that with rates that are quite often the same as those that would be available to new customers.

“Secondly, it’s because many borrowers who overindulged during the era of record low rates are now falling foul of lenders’ affordability calculations, and so for them it is impossible to move to a new lender full stop.”

June and September are expected to be particularly busy months for remortgaging due to the influx of borrowers who rushed to move house before stamp duty incentives came to an end in 2021.

According to UK Finance, some 71,100 two-year deals were taken out in the June and another 56,220 in the September. Some borrowers face paying more than twice the amount of interest on their loans when they remortgage.